The Toyota RAV4 Tesla Edition?

In a move that should help a both Toyota and Tesla, the pair has announced they will jointly develop a Toyota RAV4 electric vehicle to be built at the Toyota Woodstock, Ontario plant starting next year.

“The Tesla-Toyota joint development team has agreed that building the vehicle at the Woodstock plant on the same line as the gasoline-powered RAV4, will streamline and simplify the production process and guarantee the highest level of quality control,” said Ray Tanguay, TMMC Chairman. “This is a great example of Toyota’s determination to collaborate with companies with leading edge technology.”

Toyota agreed to pay Tesla approximately $100 million to supply the electric powertrain, which includes the battery, motor, gear box and power electronics for the RAV4 EV. Tesla will build the electric powertrains at its production facility in Palo Alto, California and then ship them to TMMC for final assembly into the vehicle.

The RAV4 EV will be sold at U.S. Toyota dealers through Toyota Motor Sales, U.S.A., Inc. Details including pricing, volume and regional distribution will be determined and announced at a later time.

Tesla is also in the process of launching its second electric vehicle, an electric family sedan called the Model S at its plant in Fremont, Calif. The Fremont plant had been owned by Toyota and GM in a a 50-50 joint venture called NUMMI.